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Intel (INTC) at CES 2019: Xeon CPUs, AI-Chip & Alliances

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The technology sector will be under the spotlight this week with CES 2019 underway.

Intel (INTC - Free Report) made a slew of announcements at the event. The company’s leaders, Gregory Bryant from Client Computing Group (CCG), Navin Shenoy of Data Center Group (DCG) and Mobileye’s Professor Amnon Shashua unveiled the latest innovations.

The chipmaker launched the much awaited Xeon Scalable CPUs featuring robust artificial intelligence (“AI”) and memory capabilities. Notably, it has been selected by Alibaba (BABA - Free Report) already.

The company showcased Xeon Scalable processor on 10nm Ice Lake architecture. Intel anticipates shipping of latest Ice Lake server processors, compatible with 14nm architecture (dubbed Cooper Lake), in 2020.

Furthermore, Intel has commenced shipping Cascade Lake Xeon Scalable processors. Cascade Lake series of processors feature support to company’s Optane DC persistent memory and instruction set of DL Boost, to facilitate AI-based deep learning (DL) inference.

Focus on AI and 5G: Key Catalysts

Additionally, the company announced that it will introduce 9th generation desktop solutions in January. Intel showcased latest hybrid CPU architecture client platform, dubbed as “Lakefield” by the company.

Notably, Lakefield utilizes Foveros 3D packaging technology and is touted “to be in production this year”.

The company informed that it anticipates shipping mobile PC CPUs supported on 10-nanometer (10nm) process to OEM partner within 2019 holiday season. The much-awaited processors utilize Ice Lake platform which is integrated with Sunny Cove CPU infrastructure, robust instruction sets and Gen 11 graphics.

With the robust features of Ice Lake platform, users are expected to benefit from accelerated AI processes, in turn providing an enhanced experience.

Intel unveiled Project Athena, by which the company aims to enable advanced laptops to utilize robust technologies including 5G and AI. The chipmaker anticipates shipping the first series of Project Athena devices by the second half of 2019.

In a bid to raise the bar in network infrastructure, Intel unveiled latest network system on chip (SoC), dubbed as “Snow Ridge.” The latest SoC based on 10nm architecture enables edge computing with seamless access to 5G wireless network and is expected to find application in 5G base stations.

Notably, the network SoC is anticipated to be available around second half of 2019.

Partnerships Galore

Intel revealed that it is working on an AI-based inference chip, NNP-I (Nervana Neural Network Processor for Inference). The chip is aimed at assisting companies having higher workloads with accelerated inference. Notably, Facebook (FB - Free Report) is one of the development partners in the project.

As part of its efforts in emerging IoT (Internet of Things) and AI domain, Intel announced alliances with Comcast (CMCSA - Free Report) and Alibaba.

Intel and Comcast attempt to offer faster and secure network with more capacity to enhance experience of gaming enthusiasts at Olympic Games at Tokyo, 2020. Intel endeavors to deliver support to industry standard by testing 10 Gb (Gigabit) technology with cable providers. The alliance is also aimed at developing technologies which are Wi-Fi 6-compliant.

Intel has collaborated with Alibaba in a bid to devise an AI-driven 3D athlete tracking technology by leveraging the chipmaker’s hardware solutions and Alibaba’s cloud platform capabilities. This path-breaking tracking technology is expected to be introduced in Olympic Games of 2020.

Mobileye inked a deal with Ordnance Survey, a U.K.-based mapping agency.

Per the terms of the deal, automotive mapping capabilities of Mobileye will assist Ordnance Survey to provide reliable customized location information services to its customers. The latest services will support 5G and intelligent mobility systems, paving the way for “a fully connected” Britain.

Abundant Market Prospects

Per Gartner, PC shipments in the third quarter increased 0.1% year over year to 67.2 million units. We believe the improvement in PC shipments favor the prospects of Intel’s new Xeon processors. The robust adoption of Xeon Scalable processors is anticipated to bolster the company’s CCG revenues in the quarters ahead.

The new CPUs are powered with robust performance features, enhancing productivity of mainstream laptops. The emergence of high-end cloud computing, thinner laptops, and demand for fast processing is expected to bode well for the newly introduced CPUs.

In fact, per a Market Research Future report, global 2 in 1 laptop market is envisioned to witness a CAGR of 20% from 2017 to reach approximately $3.4 billion by 2023. The report reinforces the company’s prospects of the newly offered solutions and enhances its competitive position against AMD.

Intel’s push into emerging 5G infrastructure market also favors the company’s growth prospects. Notably, per ResearchAndMarkets data, global 5G market is expected to reach $251 billion by 2025, at a CAGR of around 97% from 2020.

Intel’s all round attempt to explore the entirety of emerging technology market with new announcements is expected reinforce investors’ optimism in the stock.

Currently, Intel carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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